-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CukYtT+K65Wuk/TMwt72F4LgwJLixpEFCyqYEEcz+xPzwH2ljoaCJaTspThNid3M bZdfx4GexSefk1TMUFGekQ== 0000790609-99-000019.txt : 19990402 0000790609-99-000019.hdr.sgml : 19990402 ACCESSION NUMBER: 0000790609-99-000019 CONFORMED SUBMISSION TYPE: 10-K405 PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990331 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOORES LANE PROPERTIES LTD CENTRAL INDEX KEY: 0000790609 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 621271931 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K405 SEC ACT: SEC FILE NUMBER: 033-03955-A FILM NUMBER: 99581660 BUSINESS ADDRESS: STREET 1: 4400 HARDING RD STREET 2: STE 500 CITY: NASHVILLE STATE: TN ZIP: 37205 BUSINESS PHONE: 6152921040 MAIL ADDRESS: STREET 1: 4400 HARDING RD STREET 2: STE 500 CITY: NASHVILLE STATE: TN ZIP: 37205 10-K405 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) [X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the fiscal year ended December 31, 1998 or [ ] Transition Report to Section 13 or 15(d) of the Securities Exchange Act of 1934 [Fee Required] For the transition period from ________to_______ Commission File Number 33-3955-A MOORE'S LANE PROPERTIES, LTD. (Exact name of Registrant as specified in its charter) Tennessee 62-1271931 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number.) One Belle Meade Place, 4400 Harding Road, Suite 500, Nashville, Tennessee 37205 (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code: (615) 292-1040 Securities registered pursuant to Section 12(b) of the Act: None Title of each class Name of each exchange on which registered None None Securities registered pursuant to Section 12(g) of the Act: UNITS OF LIMITED PARTNERSHIP INTEREST (Title of Class) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. YES X NO Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (229.405 of this chapter) is not contained herein, and will not be contained, to the best of the registrant's knowledge, in definitive proxy of information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ X ] The aggregate sale price of the Units of Limited Partnership Interest to non-affiliates was $7,500,000 as of February 28,1999. This does not reflect market value, but is the price at which these Units of Limited Partnership Interest were sold to the public. There is no current market for these Units. DOCUMENTS INCORPORATED BY REFERENCE Documents Incorporated by Reference in Part IV: Prospectus of Registrant, dated April 22, 1986, as filed pursuant to Rule 424(b) of the Securities and Exchange Commission. PART I Item 1. Business General Development of Business Moore's Lane Properties, Ltd. ("Registrant"), is a Tennessee limited partnership organized in December 1985, pursuant to the provisions of the Tennessee Uniform Limited Partnership Act, Chapter 2, Title 61, Tennessee Code Annotated, as amended. The General Partner of Registrant is 222 Partners, Inc. The Partnership is a venturer in Moore's Lane Venture Associates (the "Joint Venture") and has controlling interest in this Joint Venture. Registrant's primary business, as a consolidated entity with the Joint Venture, is to hold for investment certain undeveloped real property located in Franklin, Williamson County, Tennessee (the "Property"). Registrant's investment objectives are preservation of investment capital and appreciation of the value of the Property due to development of the immediately surrounding areas and the growth of the community generally. Financial Information About Industry Segments The Registrant's activity, investment in land, is within one industry segment and geographical area. Therefore, financial data relating to the industry segment and geographical area is included in Item 6 - Selected Financial Data. Narrative Description of Business As of December 31, 1998, the Joint Venture owned approximately 21 saleable acres of partially developed land in Franklin, Tennessee. The Property is held for resale. The Property is included in the 1,150 acre Cool Springs Corporate and Retail Center. The development of the Property is complete. This work included construction of several major roads and interchanges, grading and utility installation. Competition: The Cool Springs Corporate and Retail Center is in various stages of development and is being developed for retail, office and mixed commercial uses similar to those considered suitable for the Property. Cool Springs Real Estate Associates, L.P. ("CSREA") owns much of the undeveloped land in the immediate vicinity of the Property. CSREA is an institutional real estate investor. Their asking prices are currently comparable to the Registrant's. There are several other competitive retail sites at the I-65 and Moore's Lane Boulevard intersection. However, the General Partner feels that the market can ultimately absorb all these sites and that the Registrant's low cost in its land will allow it to compete effectively. The Registrant has no employees. Partnership management services are being provided under a contractual agreement with Landmark Realty Services Corporation, an affiliate of the General Partners. Item 2. Properties As of December 31, 1998, the Joint Venture of which the Registrant has a controlling interest owned 21 acres of land in Franklin, Williamson County, Tennessee. The Property is included in the Cool Springs Retail and Corporate Center. The Property is located along Mallory Lane, west and south of the Cool Springs Galleria Mall. Item 3. Legal Proceedings Registrant is not a party to, nor is any of Registrant's property the subject of any material legal proceedings. Item 4. Submission of Matters to a Vote of Security Holders The security holders of Registrant did not vote on any matters during the fiscal year covered by this report. PART II Item 5. Market for Registrant's Units of Limited Partnership Interest and Related Security Holder Matters There is no established market for the Units, and it is not anticipated that any will exist in the future. The Registrant commenced an offering to the public on April 22, 1986 of 7,500 Units of limited partnership interests. The offering of $7,500,000 was fully subscribed and closed on May 30, 1986. As of February 28, 1999, there were 575 holders of record of 7,500 Units of limited partnership interests. There are no material restrictions upon Registrant's present or future ability to make distributions in accordance with the provisions of Registrant's Limited Partnership Agreement. Item 6. Selected Financial Data For the Year Ending December 31, 1998 1997 1996 1995 1994 Total Revenue $ 1,522,795 1,580,487 54,423 1,437,479 258,112 Net Income (Loss) 907,055 1,214,577 (55,302) 1,364,037 131,947 Net Income (Loss) per Limited Partner Unit 68.50 109.16 (7.30) 181.03 17.59 Total Assets 1,883,301 2,629,195 2,957,702 2,964,702 3,469,752 Note Payable - - - - 175,000 Cash Distributions per Limited Partner Unit 170 170 - 220 - Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Sales During 1998, there were several sales totalling approximately 9 acres for over $2.4 million. The sales proceeds were used to make a $1.8 million cash distribution to the partners and the remaining proceeds were reserved to cover expenses related to the sale. During 1997, there were six sales totalling approximately 30 acres for over $4.2 million. The sale proceeds were used to retire the $300,000 note payable, set aside development reserves of $686,571 and distributed $1,487,000 to the partners. The proceeds distributed from these sales allowed the Registrant to fully return all capital and preferred return to the Limited Partners, after which, all cash distributions will be allocated 31% to the general partner and special limited partners and 69% to the limited partners. The allocation ratio of limited partner to general partner and special limited partners prior to the return of capital was 99:1. There were no sales of land in 1996. Operations Other than the sales activity noted above, operations of the Registrant are comparable during 1998, 1997, and 1996 except for the following. The increase in interest income during 1998 is due to higher cash balances held during the year, especially in the Restricted cash-escrow accounts. The 1997 increase in interest expense is due to the $300,000 note payable secured in April 1997. The loan was retired in full in August 1997. During 1997, the Registrant incurred interest of approximately $11,000 and financing fees of approximately $9,000. The Registrant also incurred interest on short term loans totalling $2,000. Property tax expense includes rollback property taxes paid on the property sold. Most of the land sold in 1998 and 1997 had been taxed at a less expensive agricultural rate while the Registrant held it undeveloped. During 1997, the Registrant was allowed to keep this agricultural tax rate even though the land was included in the Cool Springs Corporate and Retail Center because the land was subject to rollback taxes. The city and county assessed rollback taxes on the date of sale of certain farm land. The tax is equal to approximately 3 years taxes at a commercial rate. Certain other parcels of the Registrant's property will be subject to this rollback tax when sold. General and administrative expenses were higher in 1998 due to escrow fees and letter of credit fees. Architect and engineering fees are related to sales activity and are higher in years with sales. Legal and accounting fees for 1996 were higher due to additional legal services needed to handle partnership issues. Miscellaneous income in 1996 represents a refund of impact fees received from the City of Franklin. This income is a result of the road development that the Registrant has completed in the City of Franklin. Liquidity and Capital Resources As of January 31, 1999, the Registrant has cash of approximately $872,261. The General Partner believes that this cash will be sufficient to meet operating needs for 1999. On November 10, 1997, W. Gerald Ezell, then the Registrant's general partner, sold his partnership interest in the Registrant. In accordance with the partnership agreement, the general partner's interest was converted into a special limited partner interest and his general partner responsibilities were transferred to the remaining general partner, 222 Partners, Inc. Mr. Ezell continues to serve on the Board of 222 Partners, Inc. Year 2000 In 1998, the Partnership initiated a plan ("Plan") to identify, and remediate "Year 2000" issues within each of its significant computer programs and certain equipment which contain microprocessors. The Plan is addressing the issue of computer programs and embedded computer chips being unable to distinguish between the year 1900 and the year 2000, if a program or chip uses only two digits rather than four to define the applicable year. The Partnership has divided the Plan into five major phases-assessment, planning, conversion, implementation and testing. After completing the assessment and planning phases earlier in the year, the Partnership is currently in the conversion, implementation, and testing phases. Systems which have been determined not to be Year 2000 compliant are being either replaced or reprogrammed, and thereafter tested for Year 2000 compliance. The Plan anticipates that by mid-1999 the conversion, implementation and testing phases will be completed. Management believes that the total remediation costs for the Plan will not be material to the operations or liquidity of the Partnership. The Partnership is in the process of identifying and contacting critical suppliers and other vendors whose computerized systems interface with the Partnership's systems, regarding their plans and progress in addressing their Year 2000 issues. The Partnership has received varying information from such third parties on the state of compliance or expected compliance. Contingency plans are being developed in the event that any critical supplier or customer is not compliant. The failure to correct a material Year 2000 problem could result in an interruption in, or failure of, certain normal business activities or operations. Such failures could materially and adversely affect the Partnership's operations, liquidity and financial condition. Due to the general uncertainty inherent in the Year 2000 problem, resulting in part from the uncertainty of the Year 2000 readiness of third-party suppliers and customers, the Partnership is unable to determine at this time whether the consequences of Year 2000 failures will have a material impact on the Partnership's operations, liquidity or financial condition. Item 8. Financial Statements and Supplementary Data The Financial Statements required by Item 8 are filed at the end of this Report. Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure None. PART III Item 10. Directors and Executive Officers of the Registrant Registrant does not have any directors or officers. 222 Partners, Inc. is the General Partner of the Registrant and as such has general responsibility and ultimate authority in matters affecting Registrant's business. 222 Partners, Inc. 222 Partners, Inc. was formed in September, 1986 and serves as general partner for several other real estate investment limited partnerships. The executive officers and directors of 222 Partners, Inc. are as follows: Steven D. Ezell, age 46, serves as a director, president and sole shareholder of the corporate general partner. He has been an officer of 222 Partners, Inc. from September 17, 1986 through the current period. Mr. Ezell is President and 50% owner of Landmark Realty Service Corporation. He was active for the four years prior to joining Landmark in property acquisitions for Dean Witter Realty Inc. in New York City, most recently as Senior Vice President. He is the son of W. Gerald Ezell. Michael A. Hartley, age 39, is Secretary/Treasurer and Vice President of the corporate general partner. He has been an officer of 222 Partners, Inc. from September 17, 1986 through the current period. He also serves as Vice President and 50% owner of Landmark Realty Services Corporation. For the three years prior to joining Landmark, Mr. Hartley was a Vice President of Dean Witter Realty Inc., a New York-based real estate investment company. W. Gerald Ezell, age 68, is a director of corporate general partner. Mr. Ezell is also a general partner of affiliated limited partnerships which own various real estate properties. Until November 15, 1985, Mr. Ezell had been for over 20 years an agency manager for Fidelity Mutual Life Insurance Company and a registered securities principal of Capital Analysts Incorporated, a wholly owned subsidiary of Fidelity Mutual Life Insurance Company. On November 10, 1997, W. Gerald Ezell, then the Registrant's general partner, sold his partnership interest in the Registrant. In accordance with the partnership agreement, the general partner's interest was converted into a special limited partner interest and his general partner responsibilities were transferred to the remaining general partner, 222 Partners, Inc. Mr. Ezell continues to serve on the Board of 222 Partners, Inc. Item 11. Executive Compensation During 1998, the Registrant was not required to and did not pay remuneration to any partners of the General Partners or any affiliates, except as set forth in Item 13 of this report, "Certain Relationships and Related Transactions." The General Partners do participate in the Profits, Losses, and Distributions of the Partnership as set forth in the Partnership Agreement. The proceeds distributed from the 1997 sales allowed the Registrant to fully return all capital and preferred return to the Limited Partners. As stated in the Limited Partnership Agreement, all future cash distributions will be allocated 69% to the limited partners and 31% to the general partner and special limited partners. The allocation ratio of limited partner to general partner and special limited partners prior to the return of capital was 99:1. Item 12. Security Ownership of Certain Beneficial Owners and Management As of February 28, 1999, no person or "group" ( as that term is used in Section 3 (d) (3) of the Securities Exchange Act of 1934) was known by the Registrant to beneficially own more than five percent of the Units of Registrant. Also as of the above date, no director of 222 Partners, Inc. was known by the Registrant to beneficially own any of the units of the Registrant. There are no arrangements known by the Registrant, the operation of which may, at a subsequent date, result in a change in control of the Registrant. Item 13. Certain Relationships and Related Transactions No affiliated entities have, for the year ending December 31, 1998, earned or received compensation or payments for services from the Registrant in excess of $60,000 except for the following: Commissions paid to minority interest holder $ 73,443 For a listing of miscellaneous transactions with affiliates refer to Note 4 of the notes to Consolidated Financial Statements herein. PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K (a) (1) Financial Statements The following Consolidated Financial Statements are included herein: Independent Auditors' Report F-1 Financial Statements Consolidated Balance Sheets F-2 Consolidated Statements of Operations F-3 Consolidated Statements of Partners' Equity F-4 Consolidated Statements of Cash Flows F-5 Notes to Consolidated Financial Statements F-6 (2) Financial Statement Schedule Independent Auditors' Report S-1 Schedule III - Real Estate and Accumulated Depreciation S-2 All other Schedules have been omitted because they are inapplicable, not required or the information is included in the Consolidated Financial Statements or notes thereto. (3) Exhibits 3 Amended and Restated Certificate and Agreement of Limited Partnership, incorporated by reference to Exhibit A to the Prospectus of Registrant dated April 22, 1986 filed pursuant to Rule 424(b) of the Securities and Exchange Commission. 22 Subsidiaries 27 Financial Data Schedule (b) No reports on Form 8-K have been filed during the last quarter of 1998. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act or 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. MOORE'S LANE PROPERTIES, LTD. By: 222 Partners, Inc. General Partner DATE: March 31, 1999 By:/s/ Steven D. Ezell President and Director DATE: March 31, 1999 By:/s/ Michael A. Hartley Vice President and Director Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities and on the dates indicated. MOORE'S LANE PROPERTIES, LTD. By: 222 Partners, Inc. General Partner DATE: March 31, 1999 By:/s/Steven D. Ezell President and Director DATE: March 31, 1999 By:/s/Michael A. Hartley Vice President and Director Supplemental Information to be Furnished with Reports filed Pursuant to Section 15(d) of the Act by Registrant Which Have Not Registered Securities Pursuant to Section 12 of the Act: No annual report or proxy material has been sent to security holders. Independent Auditors' Report The Partners Moore's Lane Properties, Ltd.: We have audited the accompanying consolidated balance sheets of Moore's Lane Properties, Ltd. (a limited partnership) and subsidiary as of December 31, 1998 and 1997, and the related consolidated statements of operations, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1998. These consolidated financial statements are the responsibility of the Partnership's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Moore's Lane Properties, Ltd. and subsidiary at December 31, 1998 and 1997, and the results of their operations and their cash flows for each of the years in the three-year period ended December 31, 1998, in conformity with generally accepted accounting principles. KPMG LLP Nashville, Tennessee January 22, 1999 F-1 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Consolidated Balance Sheets December 31, 1998 and 1997 Assets 1998 1997 Cash and cash equivalents $ 5,809 192,693 Restricted cash (note 2) 609,504 742,843 Land and improvements held for investment (note 5) 1,266,988 1,692,659 Other assets 1,000 1,000 Total Assets $ 1,883,301 2,629,195 Liabilities and Partners' Equity Liabilities: Accounts payable and accrued expenses $ 116,209 47,832 Payable to related party (note 4) 126,500 - Minority interest in consolidated joint venture (note 3) 100 100 Total liabilities 242,809 47,932 Partners' equity: Limited partners (7,500 units outstanding) 1,636,539 2,397,794 General partners 3,953 3,953 Special limited partners - 179,516 Total partners' equity 1,640,492 2,581,263 Commitments (notes 2, 3, and 4) Total liabilities and partners' equity $1,883,301 2,629,195 See accompanying notes to consolidated financial statements. F-2 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Consolidated Statements of Operations Years ended December 31, 1998, 1997, and 1996 1998 1997 1996 Revenue: Sales: Sales of land and improvements $ 2,448,096 4,205,662 - Cost of land and improvements sold (720,714) (2,213,987) - Selling expenses (note 4) (225,609) (416,942) - Gain on land sale 1,501,773 1,574,733 - Interest 20,882 5,754 4,995 Miscellaneous 140 - 49,428 Total revenue 1,522,795 1,580,487 54,423 Expenses: Interest - 22,284 500 Property taxes 176,661 154,459 60,291 Partnership and property management fee (note 4) 15,604 15,604 15,604 Legal and accounting (note 4) 21,903 19,310 25,280 General and administrative 10,455 3,538 5,193 Architect and engineering fees 12,697 13,613 2,857 Total expenses 237,320 228,808 109,725 Net income (loss) before minority interest 1,285,475 1,351,679 (55,302) Minority Interest 378,420 137,102 - Net income (loss) $ 907,055 1,214,577 (55,302) Net income (loss) allocated to: General partners $ - 4,506 (553) Special limited partners 393,310 391,363 - Limited partners 513,745 818,708 (54,749) Net income (loss) per limited partner unit $ 68.50 109.16 (7.30) Weighted average units outstanding 7,500 7,500 7,500 See accompanying notes to consolidated financial statements. F-3 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Consolidated Statements of Partners' Equity Years ended December 31, 1998, 1997, and 1996 Special Limited Limited General partners partners partners Total units amounts Balance at December 31, 1995 7,500 2,908,835 - - 2,908,835 Net loss - (54,749) - (553) (55,302) Balance at December 31, 1996 7,500 2,854,086 - (553) 2,853,533 Net income - 818,708 391,363 4,506 1,214,577 Distributions to partners (note 6) - (1,275,000) (211,847) - (1,486,847) Balance at December 31, 1997 7,500 $2,397,794 179,516 3,953 2,581,263 Net income - 513,745 393,310 - 907,055 Distributions to partners (note 6) - (1,275,000) (572,826) - (1,847,826) Balance at December 31, 1998 7,500 1,636,539 - 3,953 1,640,492 /TABLE> See accompanying notes to consolidated financial statements. F-4 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Consolidated Statements of Cash Flows Years ended December 31, 1998, 1997, and 1996
1998 1997 1996 Cash flows from operating activities: Net income (loss) $ 907,055 1,214,577 (55,302) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: (Increase) decrease in restricted cash 133,339 (439,260) 54,737 Cost of land and improvements sold 720,714 2,213,987 - Cost of land improvements (295,043)(1,279,933) (178,302) (Decrease) increase in accounts payable and accrued expenses 68,377 (56,237) 48,302 Increase in payable to related party 126,500 - - Net cash provided by (used in) operating activities 1,660,942 1,653,134 (130,565) Cash flows from financing activities: Loan proceeds-other - 445,000 - Principal payments on note payable - other - (145,000) - Principal payments on note payable - private - (300,000) - Distributions to partners (1,847,826)(1,486,847) - Net cash used by financing activities (1,847,826)(1,486,847) - Net increase (decrease) in cash and cash equivalents (186,884) 166,287 (130,565) Cash and cash equivalents at beginning of year 192,693 26,406 156,971 Cash and cash equivalents at end of year $ 5,809 192,693 26,406 Supplemental Disclosures of Cash flow information: Cash paid during the year for interest $ - 15,993 500
See accompanying notes to consolidated financial statements. F-5 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Notes to Consolidated Financial Statements December 31, 1998 and 1997 (1) Summary of Significant Accounting Policies (a) Organization Moore's Lane Properties, Ltd. (the Partnership) was organized on December 10, 1985 as a Tennessee limited partnership to acquire and hold for investment approximately 174 acres of unimproved real property in Williamson County, Tennessee. On May 30, 1986, a public offering of limited partnership units closed whereby the Partnership issued 7,500 limited partnership units and the original limited partner withdrew. During 1997, general partner W. Gerald Ezell sold his partnership interest, and the Partnership was amended to convert his interest to a "Special limited" partner interest. His general partner responsibilities were transferred to the remaining general partner, 222 Partners, Inc. The Partnership prepares financial statements and Federal income tax returns on the accrual method and includes only those assets, liabilities and results of operations which relate to the business of the Partnership. (b) Principles of Consolidation The consolidated financial statements include the accounts of Moore's Lane Properties, Ltd. and the accounts of a majority-owned joint venture. All significant intercompany accounts and transactions have been eliminated. (c) Estimates Management of the partnership has made certain estimates and assumptions to prepare these financial statements in accordance with generally accepted accounting principles. Actual results could differ from those estimates. (d) Land and Improvements Held for Investment Land and improvements held for investment is recorded at cost and include approximately 21 and 30 acres at December 31, 1998 and 1997, respectively. Land costs include amounts to acquire and hold land, including interest and property taxes during the development period. Costs to hold land, including interest, insurance, and property taxes were charged to expense in 1998 since development was substantially complete. Land improvement costs include development costs expended subsequent to the acquisition of the tract. F-6 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Notes to Consolidated Financial Statements (1) Summary of Significant Accounting Policies (continued) (e) Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of The Partnership accounts for long-lived assets in accordance with the provisions of Statement of Financial Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." This Statement requires that long-lived assets to be disposed of be reported at the lower of the carrying amount or fair value less estimated costs to sell. If such assets are considered impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets less estimated costs to sell. Impairment is recognized through the establishment of an allowance for impairment with a corresponding charge to operations. Losses upon the sale of the assets are charged to the allowance. Based upon management's analysis, the Partnership's land and improvements held for investment does not meet the definitions of impairment under SFAS No. 121. Accordingly, land and improvements held for investment is recorded at cost with no allowance for impairment necessary. (e) Cash and Cash Equivalents The Partnership considers all short-term investments with original maturities of three months or less at the date of purchase to be cash equivalents. Cash belonging to the Partnership is combined in an account with funds from other partnerships related to the general partner. (f) Revenue Recognition Income from sales of land and improvements held for investment is generally recorded on the accrual basis when the buyer's financial commitment is sufficient to provide economic substance to the transaction, and when other criteria of SFAS No. 66 " Accounting for Sales of Real Estate," are satisfied. For sales of real estate where both cost recovery is reasonably certain and the collectibility of the contract price is reasonably assured, but the transaction does not meet the remaining requirements to be recorded on the accrual basis, profit is deferred and recognized under the F-7 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Notes to Consolidated Financial Statements (1) Summary of Significant Accounting Policies (continued) (f) Revenue Recognition(continued) installment method, which recognizes profit as collections of principal are received. If developments subsequent to the adoption of the installment method occur which cause the transaction to meet the requirements of the full accrual method, the remaining deferred profit is recognized at that time. Any losses on sales of real estate are recognized at the time of the sale. (g) Income Taxes No provision has been made for Federal or state income taxes since such taxes are the personal responsibility of the partners. Annually, the partners receive, from the Partnership, IRS Form K-1's which provide them with their share of taxable income (or loss), deductions and other tax information. The only difference between the tax basis and reported amounts of the Partnership's assets and liabilities is the carrying value of land and improvements held for investment. The income tax basis includes additional land development costs not capitalized for book purposes. (h) Partnership Allocations Net profits, losses and distributions of cash flow of the Partnership are allocated to the partners in accordance with the Partnership agreement as follows: Net profits are allocated first to any partner with a negative balance in their capital account, determined at the end of the taxable year as if the Partnership had distributed cash flow, in proportion to the negative capital balance account of all partners until no partner's capital account is negative. Net profit allocations are then made to the limited partners up to the difference between their capital account balances and the sum of their adjusted capital contributions (capital balance, net of cumulative cash distributions in excess of preferred returns - 12% annual cumulative return on capital contributed). Any remaining net profit is allocated 99% to the limited partners and 1% to the general partners until the taxable year in which cumulative distributions to the limited partners equal their adjusted capital contribution plus an unpaid preferred return. Net profits are then allocated to the general partners until the ratio of the general partners' capital account balance to the capital account balances, in excess of adjusted capital contributions and F-8 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Notes to Consolidated Financial Statements (1) Summary of Significant Accounting Policies (continued) (h) Partnership Allocations(continued) unpaid preferred returns, of all limited partners is 31% to 69%. Thereafter, profits are generally allocated 31% to the general partners and 69% to the limited partners. Net losses are allocated to the 99% to the limited partners and 1% to the general partner. Partnership distributions are allocated to the limited partners in an amount equal to their preferred return (12% annual cumulative return on capital contributed) to the extent unpaid to date. Any remaining distributions are allocated 99% to the limited partners and 1% to the general partners until the limited partners have received an amount equal to their adjusted capital contributions, and thereafter, 69% to the limited partners and 31% to the general partners. The Special limited partners, created with the sale of W. Gerald Ezell's general partnership interest in 1997, are allocated income, losses and distributions previously allocated to the general partner. (i) Comprehensive Income Effective January 1, 1998, the Partnership adopted SFAS No. 130 "Reporting Comprehensive Income". SFAS No. 130 establishes standards for reporting and presentation of comprehensive income and its components in a full set of financial statements and requires that all components of comprehensive income be reported in a financial statement that is displayed with the same prominence as other financial statements. Comprehensive income is defined as the change in equity of a business enterprise, during a period, associated with transactions and other events and circumstances from non-owner sources. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. During the years ended December 31, 1998 and 1997, the Partnership had no components of other comprehensive components ofincome. Accordingly, comprehensive income for each of the years was the same as net income(loss). MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Notes to Consolidated Financial Statements (2) Restricted Cash At December 31, 1998 and 1997, the Partnership has restricted cash balances of $609,504 and $742,843, respectively, to be used to fund property improvements, consisting of road and utility work, and property taxes. (3) Moore's Lane Venture Associates On May 29, 1986, Moore's Lane Venture Associates (the Joint Venture) was formed with the Partnership and Southeast Venture Companies (Southeast) as joint venturers. On March 4, 1987, the Partnership contributed its land held for investment to the Joint Venture. The contribution of land was accounted for at book value. Southeast will contribute services for overseeing the implementation of the master land use plan and ensuring that any improvements proceed on schedule. The joint venture agreement provides that Southeast will receive 17% of the proceeds of any disposition of the property after the limited partners have received an amount equal to their capital contributions plus their preferred return as defined in the partnership agreement. (4) Related Party Transactions The General Partners and their affiliates have been actively involved in managing the Partnerships. At December 31, 1998, the Partnership had a payable to an affiliate of $126,500. Affiliates of the general partners receive fees and commissions as consideration for performing certain services. Expenses incurred for these services during 1998, 1997, and 1996 are as follows: 1998 1997 1996 Commission paid to minority interest holder $ 73,443 130,810 - Development fees (Selling Expense) 48,962 83,199 - Accounting fees 3,603 1,750 2,900 Land management fee 15,604 15,604 15,604 F-9 MOORE'S LANE PROPERTIES, LTD. AND SUBSIDIARY (A Limited Partnership) Notes to Consolidated Financial Statements (5) Land and Improvements Held for Investment The components of land and improvements held for investment at December 31, are as follows: 1998 1997 Land and carrying costs $ 581,131 922,409 Land Improvements 685,857 770,250 $ 1,266,988 1,692,659 Aggregate cost for Federal income tax purposes for this property was $1,330,706 and $1,725,060 at December 31, 1998 and 1997, respectively. (6) Distributions For the years ended December 31, 1998 and 1997, the Partnership made distributions of $1,847,826 and $1,486,847, respectively. Of these amounts, $1,275,000 and $1,275,000 ($170 and $170 per unit), respectively, were allocated to the limited partners, $572,826, and $211,847, respectively, were allocated to the Special limited partners, and $-0- and $-0- were allocated to the general partners. There were no distributions in 1996. (7) Fair Value of Financial Instruments At December 31, 1998 and 1997, the Partnership had financial instruments including cash, restricted cash, accounts payable, and accrued expenses and payable to related party. The carrying amounts of these financial instruments approximate their fair value because of the short term nature of those financial instruments. (8) Subsequent Event On January 21, 1999, the Partnership sold 6.5 acres of land for approximately $1.5 Million gross proceeds. From the sale, $706,521 was distributed to the partners. F-10 Independent Auditors' Report The Partners Moore's Lane Properties, Ltd.: Under date of January 22, 1999, we reported on the consolidated balance sheets of Moore's Lane Properties, Ltd. and subsidiary as of December 31, 1998 and 1997, and the related consolidated statements of operations, partners' equity, and cash flows for each of the years in the three-year period ended December 31, 1998. The consolidated financial statements and our report thereon are included elsewhere herein. In connection with our audits of the aforementioned consolidated financial statements, we have also audited the related financial statement schedule following. This financial statement schedule is the responsibility of the Partnership's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG LLP Nashville, Tennessee January 22, 1999 S-1 MOORE'S LANE PROPERTIES, LTD. and Subsidiary (A Limited Partnership) Schedule III Real Estate and Accumulated Depreciation Initial Cost to Cost capitalized Gross amount at Partnership subsequent which carried to acquisition at close of period
Description Encum- Land Buildings Improve- Carrying Land Buildings Total Accumu- Date of Date brances and improve- ments costs and improve- lated de- construc- acquired ments ments preciation tion ___________ ______ ____ _________________________________________ ______________ ____ 20 acres of undeveloped land in Williamson county, Tennessee $ - $ 331,144 - 685,857 249,987 331,144 935,844 1,266,988 - - 12/11/85 S-2
MOORE'S LANE PROPERTIES, LTD. and Subsidiary (A Limited Partnership) Schedule III Real Estate and Accumulated Depreciation (continued) 1998 1997 1996 (1) Balance at beginning $ 1,692,659 2,626,713 2,448,411 of Period Additions during period: Improvements 295,043 1,279,933 178,302 Deductions during period: Cost of real estate sold 720,714 2,213,987 - Balance at close of period $ 1,266,988 1,692,659 2,626,713 (2) Aggregate cost for Federal income tax purposes $ 1,330,706 1,725,060 2,880,071 See accompanying independent auditors' report. S-2 Exhibits filed pursuant to Item 14 (a) (3): MOORE'S LANE PROPERTIES, LTD. (A Tennessee Limited Partnership) Exhibit Index Exhibit 3 Amended and Restated Certificate and Agreement of Limited Partnership, incorporated by reference to Exhibit to a Prospectus of Registrant dated April 22, 1986 (Registration No. 33-3395-A) 22 Subsidiaries 27 Financial Data Schedule Exhibit 22. Subsidiaries MOORE'S LANE PROPERTIES, LTD. (A Tennessee Limited Partnership) MOORE'S LANE VENTURE ASSOCIATES A Tennessee Joint Venture One Belle Meade Place 4400 Harding Road, Suite 500 Nashville, TN 37205 EIN 62-1310146 EX-27 2
5 0000790609 MOORE'S LANE PROPERTIES LTD. YEAR DEC-31-1998 DEC-31-1998 5,809 609,504 0 0 0 0 1,266,988 0 1,883,301 242,709 0 0 0 0 1,640,492 1,883,301 2,448,096 1,522,795 720,714 946,323 237,320 0 0 907,055 0 907,055 0 0 0 907,055 68.50 68.50
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